Нефиксируемая экономическая активность в Таджикистане

The Republic of Tajikistan meets most definitions of a peripheral economy: it has few manufactured exports, is heavily regulated, and is classified by the World Bank as a low-income country, one of 36 in this classification and, along with the Kyrgyz Republic, the only former Soviet Republic with this in- come classification. For the last several years, remittances have accounted for approximately 40% of GDP, the highest percentage in the word and significantly higher than many labor-exporting countries in Latin America, Africa, and parts of Southeast Asia. Any ranking of any economic variable places Tajikistan’s economy firmly within the peripheral grouping.

The shadow economy is generally defined as unrecorded economic activity that is not subject to taxation and regulation. In Tajikistan, as in many peripheral countries, a distinction exists between the informal or shadow economy in general, which consists of all unrecorded and untaxed activity, like home production and small-scale barter, and categories of activities that are generally classified as “black market”: those that result from criminality and those that are attempts to evade burdensome regulation and/or taxation. In fact, a general assessment often heard in Tajikistan is that most of the black market would be legitimate business but is driven to informal or illegal operation by the amount of discretionary power that civil servants have under the current legal and regulatory system. In other words, much of the black market is largely not traffic in illegal goods and services but rather what is possibly more accurately described as a “shadow economy” or “informal sector.” A common statement from businessmen in the country is that they have two sets of books, one for government and one for their own recording and planning purposes. The overall shadow economy, consisting of business activity that avoids taxation and regulations, plus illegal activity, is estimated to be nearly as large as recorded GDP.31 The existence of such a large amount of unrecorded activity is important because it undercounts GDP estimates, thus influencing negotiations with multilateral bodies and shifts the incidence or burden of taxation to recorded activities.32

In the category of criminality, behaviors that are common to all countries, like gambling and prostitution, are excluded from this study. In Tajikistan, the most significant black market criminal pursuits, in terms of employment and revenue generated, involve smuggling and transportation of narcotics from Afghanistan. The scope of these activities in Tajikistan in employment numbers is unknown, but evidence exists in the form of border guard officers with apparent standards of living above that afforded by a state salary. Narcotics sales for consumption do not appear to be widespread in Dushanbe, but reports exist of opium smoking and addiction in rural areas.

The burdensome regulation and taxation system provide incentives for evasion. Start-up costs are often prohibitive for small businesses and the inability to recoup these costs for a small enterprise is a prime motivator for entry into the informal economy. The incentives, when combined with the low pay and sometimes poor training of government enforcement agents, produce conditions for corruption. Disputes with executive agencies are not checked by an independent judiciary. Courts have not been impartial, at times, and firms without full legal status hesitate to use courts or any other government entity to settle disputes.33

Tajikistan has enjoyed over 15 years of peace after a civil war, and has taken steps toward amending its commercial code. However, the burdensome system has prevented the development of a healthy business sector that offers employment opportunities to Tajik citizens. The result of this failure is that at least 800,000 Tajiks work abroad, mainly in Russia, and this number is at the low end of estimates that range well over 1 million workers.34 These numbers are indicative of a serious problem when considering that the workers abroad are heavily weighted toward able-bodied, working-age males, who are but a subset of the country’s total population of approximately 7 million.

This study focuses on the role of taxes and regulation in driving business to the informal economy, the lack of evidence that the banking sector is providing incentives for transparency, and some aspects of the effect of drug trafficking on the country.

Taxation

Taxation in Tajikistan consists of an income tax, various other employment and social security-type taxes, and a Value Added Tax (VAT). The income tax rates alone are low, ranging to a top marginal rate of 25%, but the cumulative effect of the various forms of taxes is generally regarded as burdensome. The social security tax is 25% paid by the employer and 1% paid by the employee. This high rate encourages informal employment, with wages often paid in-kind and employment not recorded under the old labor book system. Informally employed workers do not make social security or income tax payments. Barter, which is anecdotally frequent in the country, further complicates tax assessment and collection35.

The VAT rate is 20%. With the VAT, administration and collection is difficult due to the lack of an electronic registry of revenues in a given firm means that any records could very well be incomplete or, at best, inaccurate due to increased risk of arithmetical error. Even if a firm has the equipment to maintain an electronic register, the frequent power outages prevent accurate recording. Calculations of underpaid VAT range up to one-third of estimated GDP36.

Because of the absence of accurate sales records, a tax inspector typically assesses how much should be paid by a business. This example of discretionary power on the part of the inspector generates resentment among businessmen, which would not encourage voluntary compliance, and increases the incentives for the taxpayer and the tax inspector to negotiate a payment that is not in the interest of the state. A possible remedy to the tax situation, in terms of improving revenue flow to the government and reducing the inspectors’ discretionary power, is a movement toward a lump sum tax, in which businesses would pay a fixed amount of tax and keep any earnings after payment of the tax.

Regarding income tax, much of the income earned by employees is not recorded. Employees often receive payment in cash, not through a bank, or in the form of goods, so the tax authorities have no consistent way of assessing an individual’ s income or tax liability. Bank accounts are also rare, meaning that the tax authorities do not have any means of estimating income for a given period. A check against informal employment arrangements through the old Soviet system of labor books is also gone; under this system, each citizen of working age had a book in which the employer stamped a verification of employment and entered an amount for the pay rate. This system is not mandatory and its primary value is for its use in estimating pensions that are to be paid by the government, and these pensions are largely discounted or completely written off by workers in the country today.

Tax inspectors have territorial authority that allows the exercise of discretionary powers in exclusive arrangements, free from competition from other tax inspectors. A widespread belief is that these territorial arrangements are for sale, meaning that a tax inspector must recoup expenditures incurred in obtaining the franchise and, because the time limit on the franchise is often not well-established, act with little regard to the viability of the businesses in the territory under his authority.

The tax system imposes unpredictable costs on firms and individuals that opt for negotiated settlements with tax inspectors. The state suffers because these payments do not finance state operations. At the same time, such a system shifts a great proportion of the publicly-known tax burden on firms and individuals that attempt to operate in accordance with the tax code.

Other regulations

Tajikistan requires a number of steps for an enterprise to operate legally. The first step is registration as an individual entrepreneur or as a legal entity. An individual entrepreneur must obtain a patent for a specifically named activity or a certificate for more general permission to operate. Firms must obtain licenses and permits. The number of authorizations and the time spent in acquiring them is long even by CIS standards and, as points of contact between businessmen and poorly paid bureaucrats, could lead to bribery. Reforms to simplify the system by reducing both the variety of documents needed by the enterprise to obtain a given endorsement and the number of these authorizations required for legal operation are in 37 progress. ⁷

An example of the shadow economy occurs with imports of goods or equipment often come from Turkey or China, which do not have the customs relationships with Tajikistan that exist between CIS countries, where long-time suppliers to Tajik enterprises are located. The less established customs relationships facilitate underreporting for any import duties. For example, a Tajik entrepreneur can negotiate a deal in Turkey that includes the provision by the exporter of a false invoice for a piece of merchandise. The invoice will have a value that is a fraction of what the importer actually paid. Any questioning by a Tajik customs officer is more difficult to pursue with Turkish customs than it would be with Russian or Ukrainian customs. The result is that businesses often use and sell Turkish- and Chinese-produced goods, although Russia and other CIS countries produce goods that are competitive in terms and price and quality. Another method of reducing customs payments is to import as an individual, which is allowed up to certain limits. Firms will often use the identity of another person, with or without the person’s permission, to import goods as personal items and in that way avoid customs assessments.

The practice of underpaying customs duties to the state, is built into most entrepreneurs’ cost structure. Many businessmen are hesitant to contemplate acting within the law in this matter because of the expectation that competitors will continue the current practice and be able to undercut the law-abiding importer.

Banks

The absence of the banking sector as a complement to business in Tajikistan reduces transparency. Banks usually provide incentives for consistent financial reporting. However, in Tajikistan banks are not common sources of loans. The country’s largest commercial bank, Orienbank, reported loans to individuals at 3.1% of its local currency portfolio and less than 1% of its foreign currency loan portfolio, while over 95% of lending went to commercial

37 Ibid., 25-53. This section reviews the steps for legal authorization for a Tajik business.

and state enterprises38; a common perception is that loan processing is slow and concerns exist about the security of information provided to a bank. To maintain some control over information, importers often make payments to a foreign exporter through banks’ offshore operations, often in Cyprus or Lithuania.

Many professionals who earn good salaries do not have bank accounts, a condition that shows up in the low ratio of bank deposits to GDP.39 Entrepreneurs avoid banks for loans, whether for personal or business purposes. The usual sources of funds for business investment are either from personal and family savings or from foreign entities, with Russian companies as the most common40. Tajiks who work in professional positions with international organizations, where they received regularly-paid salaries, did not have bank accounts and typically took their salary payments in cash.

Even if the security of information situation is resolved, the banks’ insistence on collateral, which is common where poor accounting standards and practices make estimates of cash flows difficult, deters many borrowers. The procedure for providing collateral for a loan involves registration and notariza-tion41 and these steps, like all others in a bureaucratic environment, involve time and often some informal payments to expedite the paperwork. The burdensome registration procedures for business start-ups and their continued operation mean that a firm’s licenses may not be in order, further complicating its position in an attempt to obtain bank credit. Even if collateral is available, a bank may be reluctant to lend on the security of a firm that is not properly registered or does not have a full set of stamped licensing or title documents. In summary, banks are not seen as potential sources of financing for consumer or business uses because of security concerns and paperwork burdens.

Many Tajiks have not used banks even for remittances, an activity that could generate a significant portion of banks’ income in the form of transaction fees. Remittances play a large part in the Tajik economy, with the official estimates of this flow being enough to cover the country’s merchandise trade deficit in recent years. However, Tajiks will often talk of the use of personal connections to receive transfers from relatives working in Russia to avoid using the services of banks. These personal connections often involve the carrying of cash by a trusted associate of the transferor in Russia to the intended recipients in Tajikistan. This method involves the risk of theft along the way, including extortion at border crossings, but its use continues and indicates a severe lack of confidence in banking security even for money transfer services.

Drugs

Because of the country’s location next to Afghanistan, the world’s largest producer of opiates, Tajikistan has become a major conduit for narcotics. Estimates are that nearly 20% of the heroin and morphine exported from Afghanistan flow through Tajikistan,42 with its border riddled with unmarked crossings. Most narcotics movement into Tajikistan is of a transit nature, with little consumption outside of some opium-smoking, particularly among women and children in remote villages from which the men have left in search of opportunities in Dushanbe or in Russia. A recent development is the increased involvement of women in the trafficking activities.43 This observation is not surprising given the number of males who have left the country, thus generating a shortage of males able to make the runs, and the lack of employment opportunities in general in Tajikistan, and particularly for women who may be seeking employment to supplement incomes in the form of remittances that arrive on an irregular basis from kinsmen in Russia.

The departure of the Russian border guards from Tajikistan has brought a decrease in the amount of drug seizures in Tajikistan, though the country still leads Central Asia in the amount of illegal drugs seized.44

Heroin is gaining as a percentage of contraband from Afghanistan. Heroin has a higher ratio of value to weight than opium and the chemicals used in turning the opium into heroin are becoming easier to obtain in Afghanistan, though they are not produced in that country. These chemicals are usually imported from neighboring countries.45 Heroin labs have been in southern Afghanistan, away from the Tajik border, but as fighting continues in that region the expectation is that these labs will move to the northern part of the country, making Tajikistan an even more common export direction for the refined product.

Narcotics investigations usually target individuals instead of organizations. Arrests in Tajikistan are usually of the carriers instead of organizers. Carriers are often from poor backgrounds with limited education and are not able to provide information about the organizations moving the drugs, but even if some details are available, the absence of a plea bargaining system reduces the incentive of an arrested carrier to provide information.

Suggestions for Further Research

The number of authorizations, in the form of licenses, certificates, patents, and permits, required to operate legally has fallen. This change, if continued, will decrease the opportunities for extraction of payments to overlook deficien- cies. The pace at which these changes are implemented and their effects on growth and employment would be useful for studies of Tajikistan and for other countries that are in the transition to a market-oriented economy.

The International Finance Corporation (IFC) is encouraging the replacement of the current tax system with a lump sum tax that would reduce discretionary powers of tax inspectors. Such a system reduces risk for the state and for business. The results should be increased operation in the legal business sector and an increased, less variable flow of tax revenue to the state. A useful research project would measure the success of tax reforms in promoting business stability and tax revenue flows. A flat-rate income tax, if monetary incomes are assessable, would have similar positive effects, as the introductions of this type of system in Russia and Ukraine have indicated46.

Conclusion

The heavy burdens imposed by regulation and taxation makes operation in the formal, legal economy prohibitively expensive for most entrepreneurs. They operate in an environment that leaves them susceptible to discretionary powers of policemen and inspectors. The banking system is small and is not providing an incentive for consistent and transparent record-keeping. Drug trafficking promotes unrecorded economic activity and will continue to do so as long as risk/return calculations for yields per hectare of land planted in opium in neighboring Afghanistan remain relatively high.

The issues, with the possible exception of bordering a major opiumproducer, that cause Tajikistan’s unrecorded economic activity to grow are similar to those in other peripheral countries without firmly established institutions that enable entrepreneurs to register their firms, acquire permits, and ay taxes in a predictable manner. The size of the unrecorded economic activity in Tajikistan is large relative to GDP, meaning that these numbers underestimate economic activity and buying power in the country. The published GDP numbers for many peripheral countries are often not consistent with what observers see when they encounter automobiles in good condition, mobile telephones and other late-model consumer electronics, and other indicators of some levels of income and wealth above that suggested by widely-cited data for these countries.